£450m Corus cash call on cards

STEELMAKER Corus appears poised to raise up to £450m in a bumper rights issue that would be a big step toward sorting out its problems.

Brokers expect a one-for-one issue at 15p as new chief executive Philippe Varin gets to grips with the group's £1.5bn debt.

Optimism is growing that the former British Steel is finally on the verge of solving its debt problems. A World Trade Organisation ruling against US tariffs on steel imports should help.

The downside of a rights issue is that Corus could end up with more than 6bn shares in issue, almost as many as Barclays, which made £3bn profits last year. Even optimists expect the steelmaker to lose £130m for 2003.

French-born Varin's attempts to restore the group's fortunes have been held up by the strong euro, which is hurting its Continental customers. Asked if a share issue was planned, Corus said: 'We are looking at all options.'

The WTO ruled that US tariffs of up to 30% on imports are illegal. That should help European steelmakers, but the US, which imposed the tariffs last year, disagrees with the decision.

If it defies the WTO, it faces sanctions on £1.3bn of exports to Europe, including Harley-Davidson motorcycles, citrus fruit and textiles.